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Boris Nemtsov: “Dictators are incapable of cooperation”

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When I’m abroad, I often get asked who of the leaders of the Russian opposition I think stands out in some way. Usually I name Boris Nemtsov, Garry Kasparov, and Vladimir Ryzhkov. In doing so I always reiterate that I am not a political scientist, not a specialist, not an expert, and god knows not some kind of maven on the subject of Russian political reality… My opinion, it is absolutely subjective, as such I’ll explain some of my perspectives before getting into this interview, so the reader knows what they are getting.

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Personal impressions play a role: I am acquainted with Vladimir Ryzhkov and Garry Kasparov. These days Boris Nemtsov is known as the leader of the Solidarnost opposition movement, but he has a long history in politics, as the head of the SPS political party, and even earlier he was vice prime minister of the Russian Federation. I had come into contact with Nemtsov a long time ago, but only in writing. At that time, when I was sitting in jail, he had helped as he could, especially my lawyers. And so it was that a few days ago we finally met face to face. Perhaps even this meeting never would have happened if I felt the same level of consistent disillusionment towards Boris as I do with regard to many of his former SPS colleagues. But I don’t.

I am not convinced by the arguments of his critics, those who say he can’t be trusted in office because of his past: none of these critics seem able to point out what he specifically did that was so bad for Russia, earning him a placement in the ranks of Chubais, Gaidar, and Kiriyenko. On the contrary – he did a lot for the country. At any rate, a lot more than his current opponents ever did. He is consistent: in his antagonism towards Putin and in his politics (if this can even be called politics), in his commitment to democratic principles of the development of the country and society… You cannot accuse him of corruption or illicit gain: if you could, then Putin would have done this long ago with the hands of his very own KGB. And, if he really were the kind of guy who “gets with the program”, he’d be sitting in a cushy office under the gloomy shadow of the wings of today’s power right now.

It goes without saying that there can be all kinds of complaints and rebukes to Nemtsov the politician: bringing in Chubais to participate in the elections of the year 2003; the pre-election «letters of happiness», the totally out-of-touch-with-reality campaign ad filmed in a glitzy private jet; the inability to unite with «Yabloko»… But after these and other blunders, Nemtsov the politician left the post of head of the SPS party, feeling his responsibility for this. Responsibility for what you say and do – this is what I like in Nemtsov the politician.

Boris is a courageous person, a risk-taker, but one who knows how to soberly assess the situation. Yes, personnel policy – his vulnerable spot (about which he openly writes in his «Confessions of an insurrectionist»). But, to be fair, it’s not like the country’s thick with personnel standing around, either. Oh, there are smart and sensible people, to be sure. But often they end up simply “getting with the program”. You don’t want to go out to the barricades with people like that: they’ll sell you out when you least expect it. But we’re not talking about them here. Personally I (and I hope not just I) am interested even now in Nemtsov’s assessment of the politics of the current Russian leadership; his opinion of the role of the personality in history; about gas and oil export pipelines; about the state of the opposition…Boris Nemtsov is going to turn 50 in October of this year. He is full of strength, energy, experience, knowledge. It is truly a shame that such a person, in essence, is not at the helm in a country that desperately needs just such people.

Boris Yefimovich, the first question: why has Putin’s Russia turned away from its nearest neighbors and has begun to befriend certain countries of Latin America and Africa? Moreover, those countries that have oil. What, in your view, has prompted such a choice?

It’s not about the oil. It’s about anti-Americanism. Contemporary Putinite Russia is friends with everyone who is against America. This is a kind of complex of Putin’s in a geopolitical format. The complex of a secret agent spy, the complex of a homo sovieticus, a person who is experiencing a whole gamut of feelings in relation to America: he is jealous of it, he despises it, he imitates it, he covets it, and he fears it. All at once.

In so doing, Putin’s logic is crazy from the point of view of Russia’s interests, but from the point of view of homo sovieticus – it’s understandable: the enemies of America are my friends. We’re friends with Latin America very selectively. We’re friends with Venezuela, but not friends with Chile, with Brazil. Because Venezuela with Chavez at the head is an anti-American Frondeur. Venezuela offers the aquatic basin of its sea for the conducting of pseudo-exercises with rustbucket ships and Tu-160 bombers that just barely managed to fly there. Hugo Chavez buys Russian arms to repel “American aggression.” True, I don’t remember a single time when America was at war with Venezuela. Plus there are some kind of general talks about how the oil and gas fields in the basis of the Orinoco river in Venezuela could be developed with the help of Russian companies. For now that’s just talk. TNK-BP, Lukoil are hypothetically participating there.

The business component of these relations occupies last place. First place is occupied by anti-Americanism and the military-technical cooperation associated with it – deliveries to Venezuela of Kalashnikov’s machine guns, helicopters, I believe they’ve got a contract for several airplanes, and the conducting of comical, I would say, joint exercises. The Russian-Venezuelan commission is headed by Igor Sechin – Putin’s closest partner-in-crime and comrade-in-arms – that says it all. From the point of view of common sense, Venezuela is our competitor on the oil market and can not be our friend. Besides that, Venezuela belongs to OPEC, and OPEC is Russia’s biggest competitor on the international market; moreover, by establishing quotas for oil or lifting them, it affects the economy and social life n Russia. Therefore, from the point of view of a sober-minded politician, Venezuela could be in some kind of sense a partner, but not a friend. But this is the logic of normal people, while Putin’s got another kind of logic. The same thing concerns Iran.

It seems to me that all these leaders with their dictatorial habits aren’t so simple and friendly towards us as the pro-Putin mass information media make them out to be…

You’ve got to understand that dictators are incapable of cooperation. Cooperation assumes compromise. Dictators aren’t inclined to compromise. They’re inclined to usurping power. It is precisely for this reason that nothing good is ever going to come out for us with Lukashenko, with Karimov, Rakhmonov, with Berdymukhamedov, to a lesser extent with Nazarbayev, because Nazarbayev is a very smart person… A dictator and another dictator can never come to an agreement with each other – this is known from the times of Hitler and Mussolini. There can therefore be no fraternity and cooperation between dictators. This is an intra-species struggle – cruel and uncompromising.

That is, ties with the countries of Latin America are not promising or advantageous for the Russian economy?

Ties can be promising if they’re based on mutually advantageous economic cooperation, and not on anti-Americanism.

But presidents of Brazil and Chile Lula da Silva and Michelle Bachelet aren’t going to start talking with Putin themselves…

Of course not. They’re social-democrats, but they are democrats. Europe’s closer for them – historically as well: the Portuguese, the Spanish, and the German influence. They suffered from dictatorships – especially Chile. Therefore, for them, Putin – this is a threat. In the political sense they’re antipodes. And Putin isn’t placing his bets on them, because mentally they are ideologically alien to him. Like everybody in Latin America, they don’t exactly like the USA either, they consider themselves in a certain sense economic vassals of America. But on the other hand, they understand that with such a superpower, possessing technologies, intellect, education – it is detrimental to argue.

Therefore they tray to observe polite neutrality with America. And they’re doing the right thing; I’d do the same. But this is no good for Putin- he needs a hostile anti-American rhetoric and position, a Fronde, in order to support the complex of the enemy inside the Russian people, to strengthen his popularity, especially against the background of the crisis, and the main reason why there isn’t immunity – this is corruption. A large part of the state aid that they are attempting to provide is pilfered. Therefore no matter how many billions they give, the mansions are going to grow on Rublevka [Rublevskoye chausse, the preferred address of Moscow’s nouveaux riches–Trans.]. But from the point of view of the creation of new jobs, the development of the economy – nothing’s happening.

This is a kind of black corruptional box – the Putinite state. No matter how much money you cram into it – nothing comes out. In order to direct the wrath of the people at an external enemy, Putin needs a serious enemy. Georgia and the Ukraine don’t fit the bill, that’s why America has been chosen. Barack Obama messed up this game a little bit; he doesn’t look like Uncle Sam, he looks more like a Hollywood actor. His black skin and Hollywood smile are seriously hurting Putin. It’s rather hard for Putin to say that Obama’s at fault for the arms race, for the war with Iraq… But the general anti-American vector remains.

Medvedev’s voyage to Africa and kissy-kissing with the local leaders doesn’t seem like overt anti-Americanism…

There’s another topic here – an anti-Chinese one. Africa is already found under China’s control. The Chinese are conducting an active policy there. They need resources, first and foremost oil, metals. They are actively putting money into Africa. At the party-state level. This is a rivalry not with America, but with China. This is a kind of jealousy. The voyage, of course, from a point of view was, perhaps, not even bad. They walked around without neckties, they talked about something. But from the point of the essence of the question – it was a big nothing. I never did understand: was there even one intelligible decision about investments, about some kind of joint projects adopted? More likely, this was PR. The Kremlin – this is one huge PR office. For them the essence of the matter isn’t very important, what’s important is image.

But they don’t forget about business interests either. In Latin America, in that same Venezuela, they talked something about gas rings…

Of course there are business interests. For Putin this is Gazprom. For Medvedev it’s not clearly expressed for now. But, being a satellite of Putin’s, it, most likely, is also Gazprom. In Venezuela besides blah-blah-blah there are no concrete business affairs, concrete projects, advanced to the stage of joint work.

Let’s talk about concrete projects advanced to some kind of real business, like Nord Stream, or to some stage of lobbying, like South Stream…

Short answer to this question… There’s a book of Vladimir Milov’s and mine “Putin and Gazprom.” I advise reading it, because it remains topical. Because of the talentless management of the gas sector – the personal management of Putin – a problem has arisen in Russia: Russia has a gas shortage. Production of gas this year at Gazprom fell by 25%. And shipments of gas to the European market – by 50%. From the point of view of Gazprom – this is bankruptcy. From the point of view of the country’s economy – this is the loss of the most important liquid market of Europe. The loss of this market took place first and foremost due to Putin’s anti-Russian policy, his never-ending wars with Ukriane and his beyond-the-limits aggressive position in relation to European partners – that if you’re going to behave yourselves badly, then we’re going to sell gas to China. Plus the crisis.

Bottom line: Statoil has increased gas deliveries to Europe, Algerian companies have increased deliveries, Qatar, the largest producers of liquefied gas after Russia, has increased. And Russia’s radically reduced deliveries and has thereby deprived Gazprom of huge cash. Second: Putin’s got an idea not to allow alternative pipelines, first of all Nabucco. It’s a maniacal idea. The Nabucco project is gathering steam: the Europeans have already reached an agreement with Turkey. In Turkmenistan they’ve found new gas fields. There are also the Iranian huge gas fields in reserve. But the absurdity of Putin’s policy is in that he, in order to not allow Nabucco, decided to purchase gas in Turkmenistan at insane prices – he’s contracted Turkmen gas at 340 dollars per thousand cubic meters at the border of Central Asia with Russia. The average European price on the market – 250 dollars. That is, 340 plus transport costs, plus trading markup – the price was supposed to have been around 500, but it is now 250 on the market.

In such a manner, on every thousand cubic meters Gazprom is losing 200-250 dollars. When Gazprom management announced to Putin that his contract for 340 dollars – this is the bankrupting of Gazprom, that purchases of 40 bln cubic meters – this is guaranteed bankruptcy and default on all of Gazprom’s obligations, the pipeline was blown up. The pipeline blew up! They stopped collecting gas from Turkmenistan, the pressure fell, and as a result a hydraulic shock took place. In the end, as of April Russia isn’t buying Turkmenian gas. Relations with Turkmenistan are abominable. They have made Berdymukhamedov an enemy of Russia. And all this because of Putin, who did not want the Turkmens to ship gas into Nabucco. As a result, they’ve become even more enthusiastic about Nabucco.

Gazprom has a horrible reputation, as a purchaser of Central Asian gas. Because this conflict is being watched both by the Kazakhs and the Uzbeks, who sell us gas. In such a manner, the complete bankruptcy of the Putinite policy in the gas sphere has led to where the Nabucco project is gathering steam, and now it’s got a raw-material base: and namely Turkmen fields, from which, in fact, Putin has turned away. In such a manner, the Nabucco project is going to happen, hundred percent. There is a problem there with Turkey, but they’ll solve it: Turkey, a NATO member, wants into the European Union… At the end they’ll agree, what choice have they got?

Now North Stream and South Stream. Both projects are sheer adventurism for the simple reason that they’ve got no gas. If not for the crisis, our gas shortage within Russia would already be 60 bln cubic meters. The capacities announced for North Stream – 55 bln cubic meters, for South – 61 bln cubic meters. In such a manner, the construction of these pipes with an announced capacity of over 100 bln cubic meters – this is money thrown away. Moreover, we’re talking here about tens of billions of dollars. There were all kinds of different prices named there, after all; Miller [chairman of the Gazprom management board–G.P.] named some totally ridiculous price. My estimate – 20 billion dollars for South Stream and 15 bln – North. These prices are tentative, but more or less in the ballpark. That is, 35 bln dollars need to be spent in order to build the pipes.

Meanwhile – there’s no gas. Putin wants to set up these bypasses so as not to depend on Byelorussia and the Ukraine. Well, that’s an argument. But there’s a problem. Transit of gas through the Ukraine – 130 bln cubic meters. Therefore, even if you let all the gas through Sough Stream, you will still need to run 70 bln through the Ukraine. Dependence on the Ukraine will still be there. That is, this won’t solve the problem. The problem with Belarus, yes, in principle, it solves. But we don’t have problems about gas with Belarus, because Gazprom now has an equity stake in Beltransgas – this is a guarantee that everything will be more or less calm with transit. As of today, Lukashenko has given away 37.5% of Beltransgas… Given away – that’s putting it mildly. Every tranche of 12.5% cost Gazprom 625 mln dollars. Moreover, the last tranche, the one that’s going to bring Gazprom’s stake up to 50%, Lukashenko’s not going to give it away. He’ll think up something. He’s ready to get into a fight with anybody at all, what he won’t give away, he’ll toss.

The prospects for Nord Stream look rosier than those of South Stream: the pipes have already been cast there, the European Union has recognized it as a priority project… And the partner – the Germans – are fundamentally suitable. Of course, they’re not putting all their eggs in one basket, that’s why they’re participating in Nabucco too. But if, in your opinion, Nord Stream – is an insane project, then why are the Germans participating there?

The Germans are behaving themselves very pragmatically. The Germans want Nord Stream so as not to depend on the Byelorussians. They want Nabucco in order to diversify deliveries. They buy gas from the Norwegians. They’re transitioning to liquefied gas, to alternative fuel…They’re doing everything to create a competitive environment on their market. Good for them! If they had said that Nord Stream is needed, but South Stream no, then I would say that this is a strange position. But as it is, if I were in Merkel’s place I too would say: Nord Stream? Do it! Negotiate an agreement about the environment with the Swedes and the Finns, about transit along the Baltic seabed with everybody… You can keep Schroeder, who has been bought by Putin; we don’t need him here in Germany….The position of the Germans is economically correct. Yes, this position in relation to Poland is bad. But the Germans have never been particularly generous with Poland. In relation to the Scandinavians it’s bad, but from the point of view of the Germans – it’s advantageous for them.

Russia’s argument here: it’s advantageous for us to have a reliable purchaser of our gas in the person of the Germans…

Naturally, Germany – is one of the biggest economies in the world, it pays real money.. For Putin, Gazprom – is his own. Everything is clear. But Nord Stream will not happen. They can drop the pipes. But there won’t be any gas. Shotkman is going to take 7-9 years to develop. Shtokman is being developed. This is money, kickbacks, corruption. Awaiting it in the best case is the fate of Blue Stream: something’s lying on the bottom, something is wanly making its way through it.Lukashenko  is on the hook. But this is a non-commercial project, this is an ambitious political Putinite project. Shtokman won’t be happening any time soon. The Yamal field requires more than $200 bln in investments. It’s on ice. In the entire time of Putin’s rule only one field has been developed – Yuzhno-Russkoye. In 10 years! One! Simply outrageous. The rest has been pilfered or stolen in the form of stripping Gazprom assets – we’ve written about this in the report.

Oil pipelines and projects – in what is their difference from gas ones?

Oil – is an exchange-traded commodity. Oil is transported in tankers. There’s wild competition on the oil market. Here everything is normal, and there are no contracts. Okay, they’re building ESPO [the Eastern Siberia-Pacific Ocean pipeline–Trans.] to bypass Ventspils… From the point of view of the economy of the country this is normal. All these projects are more or less commercial and exchange-traded.

(To be continued with Part 2 of our interview with Boris Nemtsov)